Tax Study Group

As part of the budget process for the T/E School District, a Tax Study Group composed of community volunteers was formed to determine the impact of an earned income tax (EIT) on residents and the school district. The goal of the group was to identify the pros and cons of an EIT for residents and then present their findings in a public presentation to the community. The Tax Study Group will offer its findings on Thursday, November 3 at 1 PM at the T/E Administration office, 940 W. Valley Rd, Suite 1700, Wayne and again at 7 PM at the Valley Forge Middle School, 105 W. Walker Road, Wayne. Please plan to attend so that you can make an informed decision on EIT (in the event it is on the Primary Election ballot in April 2012.

I have expressed my disappointment that the Republican candidates (school board and supervisor) took an advance stand against an earned income tax prior to the presentation of the Tax Study Group. In fairness to the process, and to the volunteer’s time of those serving on the study group, why not wait until after the presentation of the EIT before publicly declaring that you are against it. The severity of our school district’s economic situation requires that all options be explored – the presentation by the Tax Study Group on the earned income tax is one of those options.

An ‘As I See It’ article written by John Petersen, resident of Paoli appeared in the Main Line Suburban newspaper a couple of weeks ago. The article was written shortly after the first bright yellow, ‘no EIT’ signs began appearing in the township. Because the article was not included on Main Line Media’s online site, I could not provide a link on Community Matters.

It is with permission from the author, that I include the article below:

As I See It: Those little yellow GOP signs: proof the GOP does not respect you

If you have been driving around Tredyffrin (since this is not a walking township), you may have noticed a new type of yellow growth sprouting up all over the place. Naturalists have classified it as Fungi Reipublicae. In fact, these yellow growths are actually a new version of the yellow GOP signs that we saw in 2007. These signs come in two flavors: “No Earned Income Tax” and “Top Ranked Schools.” Both cite that you should “Vote Republican”. Let’s break down the claims.

No Earned Income Tax

This sign would have you think that there is an active question in front of the voters and that if you vote Republican, you will be saved from the evils of an Earned Income Tax. Let’s set aside the fact that many already pay an EIT for a moment and instead, concentrate on the straw man argument that Tredyffrin GOP is perpetuating. In fact, there is an earned income tax study committee that has been commissioned by the school board. That committee was first suggested by Republican school board member Kevin Mahoney. To review, there is no active tax question in front of the voters and the only group that is studying the feasibility of an EIT in Tredyffrin was suggested by a Republican.

Top Ranked Schools

It’s true, T/E Schools are quite good. The Tredyffrin Republican Committee would have you believe that Republicans, and Republicans alone are responsible for our “top ranked schools.” In fact, there are a number of Democrats on the school board. I guess they have nothing to do with the successes. Fine, let’s give all the credit to the Republicans. But if we do that, let’s examine the whole cloth. Of Lower Merion, Radnor and T/E, is T/E the best? In terms of facilities, absolutely not. While T/E has retrofitted old buildings, both Lower Merion and Radnor have made a commitment to invest in infrastructure, the type that is required for children to get a top-notch public education in the 21st century. As for test scores, college acceptance, etc – Lower Merion and Radnor are at least as good as T/E.

How about labor relations? T/E is definitely not at the top of the class there? How about fiscal responsibility? T/E is about 9 Million in the hole. You know all of the sweetheart deals for teachers the Republicans are complaining about? Guess what, it’s the Republican led school board that has consistently given the unions what they wanted. At the same time, they are not keen on paying for it. Those same Republicans have consistently raised our property taxes year after year. And yet they are the same people who claim to be protecting us from the evils of an earned income tax.

Any organization that would try and sell the political rhetoric that we see in these yellow signs clearly does not respect their customer. The Republicans believe that we are all too stupid and too quick to fall into the fear trap. The Republicans are banking on the fact that we will believe the scare tactics that the other side is just out to tax and spend our money. Seems to me, the Tredyffrin Republicans have done a good job of that on their own already. They don’t need help from anybody! And never forget, the Tredyffrin Republicans is the party of Bob Lamina, and Paul Olson. If that is not enough reason to give the Tredyffrin Republicans a vote of no confidence, I don’t know what is.

The T/E School District held its first meeting of the newly created Tax Study Group. Thank you to Ray Clarke for attending and providing Community Matters with his personal observations and comments. I spoke at length with Ray in regards to the meeting. Based on our conversation and Ray’s notes below, it looks like the Tax Study Group could use the assistance of a tax attorney. If there is someone living in Tredyffrin or Easttown with that expertise, perhaps they could offer their assistance in the school district’s EIT project.

Below are Ray Clarke’s comments from the Tax Study Group meeting:

The kick-off meeting for the TESD Tax Study Group (TSG) was held on Thursday. It was a long meeting, focused on bringing the TSG up to speed on basic district financial and demographic information. The TSG clearly has a long way to go, but at the end some organization emerged that leaves me hopeful for the outcome. I think it will be important that they formalize a way to get direct community input. Some observations:

The TSG was supported by Art McDonnell and the same consultant from the PSBA that worked on the 2006 exercise. A majority of the Board was in the audience, plus Tredyffrin Supervisor Mike Heaberg and about half a dozen community members.

The core of the meeting was a presentation of basic district data by the consultant. Hopefully the large binder will be a good reference, but more focus might have helped. Also, much of the data was dated and there were a disappointing number of mistakes – one important one alertly caught by Ed Stevens of the TSG. But, good info on the district’s personal income and assessed values, both trends and distribution, which will definitely be important factors in the analysis.

My selection of good TE rules of thumb and factoids for armchair analysts (it was stated that the materials will be available on the TESD web site):

– $2.3 billion of personal income

– $5 billion of property assessment, distributed according to the 80/20 rule.

– Median household income for Tredyffrin ~$100,000, for Easttown ~$130,000

– 25% of the TE population under 18;

– 16% over 65 (both percentages higher in Eastown and lower in Tredyffrin).

– Huge bubble in earned and personal income in 2007 – up more than 30% over the previous year.

TSG organization: William Mullin emerged as the organizing force.

No meeting on September 29th; other meetings will last from 7 to 9:30pm. Possible final presentation to the community on November 3.

The objective of the TSG was reinforced many times: to present a set of Pros and Cons to the Board for consideration. In my opinion the TSG will provide the greatest service if it ensures that the set is driven by data and analysis, not anecdote.

One important area for up-to-date, authoritative data: what will be the impact of an EIT on Philadelphia workers? Can TE levy an EIT on those wages, or otherwise get any benefit (gaming revenues?). Under what conditions, and what are the (quantified) odds of those conditions applying? This will have an important impact on the possible revenues and the number of residents affected.